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February 23, 2022 at 4:19 PM EST

IMAX CORPORATION REPORTS Q4 AND FULL-YEAR 2021 RESULTS

- Strongest Quarterly Revenue, Operating Income, and Earnings Per Share since 2019 Underscore Company's Position as a Premier Global Technology Platform for Entertainment and Events
- Full-Year 2021 Results Demonstrate Strong Momentum, with 146% Growth in Global Box Office, as IMAX Captures its Highest Share Ever of Yearly Global Box Office
- IMAX Continues to Evolve Core Business and Expand Ability to 'Eventize' Content with Live and Interactive Events, Highlighted by Partnerships with Amazon Music, Apple, Disney, and Warner Bros. and the Company's First-Ever Live Concert featuring Kanye West and Drake
- Landmark IMAX Enhanced™ on Disney+ Agreement Dramatically Expands Company's In-Home Entertainment Footprint to more than 80 Million subscribers
- Growth in IMAX DNA, Local Language, and Blockbusters Drive IMAX Global Market Share to Record 3.0% in 2021 -- Up from 2.6% in 2019 -- Peaking at 3.5% Globally and 5.6% Domestically in Q4

NEW YORK, Feb. 23, 2022 /PRNewswire/ -- IMAX Corporation (NYSE: IMAX) today reported financial results for the fourth quarter and full-year 2021 demonstrating its superiority at the global box office and the increasing diversification of its business — across platforms and around the world.

For the full-year 2021, IMAX drove solid improvement in results over the prior year, with net loss attributable to common shareholders improving from ($143.8) million to ($22.3) million and Adjusted EBITDA(1)increasing to $68.6 million from ($13.1) million in the prior year.

The Company's fourth quarter was highlighted by its strongest quarterly results since 2019 across key financial metrics, including: revenue growth of 94% to $108.6 million; improvement in net income attributable to common shareholders to $10.1 million, or $0.17 per share, versus a loss of ($21.2) million, or ($0.36) per share, in the prior-year period; improvement in adjusted net income attributable to common shareholders(1) to $18.4 million, or $0.31 per share, versus an adjusted loss(1) of ($12.7) million, or ($0.21) per share, in the prior-year period; improvement in Adjusted EBITDA(1) to $44.0 million versus $10.0 million in the prior-year period.

Notably, the Company's quarterly results met or exceeded pre-pandemic levels across key metrics. IMAX delivered Operating Income, Global Box Office, and Gross Margin in the fourth quarter of 2021 that exceeded the fourth quarter of 2019; as well as quarterly Adjusted EPS(1) and Adjusted EBITDA(1) substantially in-line with the fourth quarter of 2019.

(1)    Non-GAAP Financial Measure. See the discussion at the end of this earnings release for a description of these non-GAAP financial measures and reconciliations to the most comparable GAAP amounts.

"In the fourth quarter alone, IMAX turned in a dominating performance at the global box office, launched a major streaming partnership with Disney+, and created a series of exclusive events connecting theatrical and streaming in a way that few brands can," said Richard L. Gelfond, CEO of IMAX Corporation. "World-class creators of all types are choosing our technology and platform to connect with fans around the globe — opening a world of opportunity to reimagine and grow The IMAX Experience®."

"Our results for the fourth quarter underscore that IMAX is a premier, global technology platform for entertainment and events. The fact that IMAX is driving results at or above what we achieved in 2019 — which was by many measures, our best year ever — reaffirms that we are not an exhibitor and have moved beyond recovery mode. With strong a balance sheet that affords us security and capital allocation flexibility, we are well-positioned to capitalize on our momentum and continue to evolve and grow our business."

"Our full-year results are highlighted by a dramatic, positive swing in profitability of more than $80 million in Adjusted EBITDA(1). Furthermore, IMAX captured a greater share of the global box office than ever in 2021.

These achievements demonstrate our ability to quickly capitalize on improving market trends, and underscore how well-positioned IMAX remains for the highly- anticipated 2022 film slate, which boasts more expected IMAX DNA than ever."

"Global audiences are choosing IMAX, and we're meeting that demand with our most dynamic, diverse content portfolio ever. We're delivering more 'IMAX DNA' in the biggest Hollywood blockbusters; a rapidly expanding slate of local language films from studios and filmmakers across China, Japan, India, Russia, and France; exclusive events and experiences with creators and artists ranging from Kanye West to The Beatles; and a growing library of IMAX Enhanced™ content to streaming platforms and consumer devices."

Fourth Quarter and December Year-to-Date Financial Highlights



Three Months Ended



Year Ended




December 31,



December 31,


In thousands except per share data


2021



2020



YoY %

Change



2021



2020



YoY %

Change


Total Revenue


$

108.6



$

56.0




94

%


$

254.9



$

137.0




86

%


























Gross Margin


$

64.0



$

20.3




215

%


$

134.4



$

21.5




524

%

Gross Margin (%)



59

%



36

%







53

%



16

%






























Net Income (Loss) attributable to common shareholders


$

10.1



$

(21.2)



N/A



$

(22.3)



$

(143.8)



N/A


Diluted Net Income (Loss) per share attributable to common shareholders


$

0.17



$

(0.36)



N/A



$

(0.38)



$

(2.43)



N/A


Adjusted Net Income (Loss) attributable to common shareholders(1)


$

18.4



$

(12.7)



N/A



$

(8.4)



$

(112.1)



N/A


Adjusted Net Income (Loss) per share attributable to common shareholders(1)


$

0.31



$

(0.21)



N/A



$

(0.14)



$

(1.89)



N/A



























Adjusted EBITDA per Credit Facility attributable to common shareholders(1)


$

44.0



$

10.0




340

%


$

68.6



$

(13.1)



N/A


Adjusted EBITDA Margin attributable to common shareholders (%) (1)



45.0

%



20.8

%



116

%



31.0

%



(10.8)

%


N/A


_______________

(1)    Non-GAAP Financial Measure. See the discussion at the end of this earnings release for a description of these non-GAAP financial measures and reconciliations to the most comparable GAAP amounts.

Fourth Quarter and December Year-to-Date Segment Results(1)



IMAX Technology Network



IMAX Technology Sales and Maintenance






























Revenue



Gross Margin



Gross Margin %



Revenue



Gross Margin



Gross Margin %


4Q21


$

51.3



$

36.8




72

%


$

53.4




$

26.2




49

%

4Q20


17.7




7.3




41

%


36.4





13.6




37

%

% change



190

%



404

%







47

%




93

%































YTD 4Q21


$

116.8



$

66.5




57

%


$

126.8




$

64.3




51

%

YTD 4Q20


46.1




4.2




9

%



79.8





28.0




35

%

% change



153

%



1,483

%







59

%




130

%





_______________

(1)    Please refer to the Company's Form 10-K for the year ended December 31, 2021 for additional segment information.

IMAX Technology Network

  • IMAX Technology Network revenues increased to $51.3 million in the fourth quarter of 2021, compared to $17.7 million in the prior-year period. The strong performance of Hollywood releases drove the increase in gross box office and revenue.
  • Gross margin for the IMAX Technology Network of $36.8 million in the fourth quarter of 2021, compared to $7.3 million in the prior-year period as improved box office performance drove higher revenue and margin expansion.

IMAX Technology Sales and Maintenance

  • IMAX Technology Sales and Maintenance revenues increased to $53.4 million in the fourth quarter of 2021, compared with $36.4 million in the prior year period due to the continued global reopening of the IMAX® theater network and the resumption of normal operations, which led to a higher level of IMAX Theater System installations. Also, due to the recovery of the theatrical exhibition industry and the strength of the fourth quarter IMAX Network GBO, which exceeded pre-COVID fourth quarter of 2019 levels, the Company ended the temporary relief program for its exhibitor customers and, as a result, recognized maintenance revenue of $6.3 million that had been deferred due to uncertainties associated with the COVID-19 global pandemic, including $2.5 million that had been deferred from 2020 with the remainder from the first nine months of 2021.
  • Gross margin for IMAX Technology Sales and Maintenance increased to $26.2 million compared to $13.6 million in the prior-year period. The increase in gross margin was the result of higher maintenance and IMAX System installation revenue.

Cash Balances and Outstanding Debt

Total cash and cash equivalents as of December 31, 2021 were $189.7 million. Total debt, excluding deferred financing costs was $233.6 million as of December 31, 2021.

Share Count and Capital Return

Weighted average basic and diluted shares outstanding in the fourth quarter of 2021 were 58.9 million and 59.8 million, respectively, compared to 58.9 million of basic and diluted shares outstanding in the fourth quarter of 2020. During the fourth quarter of 2021, the Company repurchased 524,519 of its shares at an average price of $17.70 for a total of $9.3 million. IMAX China repurchased 3.1 million shares at an average price of $1.61 per share for a total of $5.0 million. A total of $75.5 million remains available under the Company's outstanding share repurchase authorization, which was extended an additional year through to June 2022.

Supplemental Materials

For more information about the Company's results, please refer to the IMAX Investor Relations website located at investors.imax.com.

Investor Relations Website and Social Media

On a weekly basis, the Company posts quarter-to-date box office results on the IMAX Investor Relations website located at investors.imax.com. The Company expects to provide such updates on Friday of each week, although the Company may change this timing without notice. Results will be displayed with a one-week lag.

The Company may post additional information on the Company's corporate and Investor Relations website which may be material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website in addition to the Company's press releases, SEC filings and public conference calls and webcasts, for additional information about the Company

Conference Call

The Company will host a conference call today at 5:00 PM ET to discuss its fourth quarter 2021 financial results. This call is being webcast by PGI and can be accessed at investors.imax.com. To access the call via telephone, interested parties in the US and Canada should dial (800) 220-8474 approximately 5 to 10 minutes before the call begins. Other international callers should dial (647) 484-0475. The conference ID for the call is 6273867. A replay of the call will be available via webcast at investors.imax.com or via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 6273867.

About IMAX Corporation 

IMAX is a premier global technology platform for entertainment and events. Through its proprietary software, theater architecture, patented intellectual property, and specialized equipment, IMAX offers a unique end-to-end solution to create superior, immersive content experiences for which the IMAX® brand is globally renown. Top filmmakers, movie studios, artists, and creators utilize the cutting-edge visual and sound technology of IMAX to connect with audiences in innovative ways. As a result, IMAX is among the most important and successful global distribution platforms for domestic and international tentpole films and, increasingly, exclusive experiences ranging from live performances to interactive events with leading artists and creators.

IMAX is headquartered in New York, Toronto, and Los Angeles, with additional offices in London, Dublin, Tokyo, and Shanghai. As of December 31, 2021, there were 1,683 IMAX theater systems (1,599 commercial multiplexes, 12 commercial destinations, 72 institutional) operating in 87 countries and territories. Shares of IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade on the Hong Kong Stock Exchange under the stock code "HK.1970."

IMAX®, IMAX® Dome, IMAX® 3D, IMAX® 3D Dome, Experience It In IMAX®, The IMAX Experience®, An IMAX Experience®, An IMAX 3D Experience®, IMAX DMR®, DMR®, IMAX Enhanced™, IMAX nXos® and Films to the Fullest®, are trademarks and trade names of the Company or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions. More information about the Company can be found at www.imax.com. You may also connect with IMAX on Instagram (https://www.instagram.com/imax), Facebook (www.facebook.com/imax), Twitter (www.twitter.com/imax) and YouTube (www.youtube.com/imaxmovies).

For additional information please contact:

Investors:
IMAX Corporation, New York
Brett Harriss
212-821-0187
bharriss@IMAX.com

Media:
IMAX Corporation, New York
Mark Jafar
212-821-0102
mjafar@imax.com 

 

Forward-Looking Statements

This earnings release contains forward looking statements that are based on IMAX management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. These forward-looking statements include, but are not limited to, references to business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, future capital expenditures (including the amount and nature thereof), industry prospects and consumer behavior,  plans and references to the future success of IMAX Corporation together with its consolidated subsidiaries (the "Company") and expectations regarding the Company's future operating, financial and technological results. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the Company is subject to a number of risks and uncertainties, including, but not limited to, risks related to the adverse impact of the COVID-19 pandemic; risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States and Canada; risks related to the Company's growth and operations in China; the performance of IMAX DMR® films; the signing of IMAX Theater System agreements; conditions, changes and developments in the commercial exhibition industry; risks related to currency fluctuations; the potential impact of increased competition in the markets within which the Company operates, including competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks relating to consolidation among commercial exhibitors and studios; risks related to brand extensions and new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security and data privacy; risks related to the Company's inability to protect the Company's intellectual property; risks related to climate change; risks related to weather conditions and natural disasters that may disrupt or harm the Company's business; risks related to the Company's indebtedness and compliance with its debt agreements; general economic, market or business conditions; the failure to convert IMAX Theater System backlog into revenue; changes in laws or regulations; any statements of belief and any statements of assumptions underlying any of the foregoing; other factors and risks outlined in our periodic filings with the SEC; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this earnings release are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX's most recent Annual Report on Form 10-K. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Primary Reporting Groups

The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements; (iii) IMAX Systems, (iv) IMAX Maintenance; (v) Other Theater Business; (vi) Film Distribution; and (vii) Film Post-Production; and (viii) New Business Initiatives. The Company organizes its reportable segments into the following four categories, identified by the nature of the product sold or service provided:

(i)      IMAX Technology Network, which earns revenue based on contingent box office receipts and includes the IMAX DMR segment and contingent rent from the Joint Revenue Sharing Arrangements ("JRSA") segment;

(ii)    IMAX Technology Sales and Maintenance, which includes results from the IMAX Systems, IMAX Maintenance and Other Theater Business segments, as well as fixed revenues from the JRSA segment;

(iii)  Film Distribution and Post-Production, which includes activities related to the distribution of large-format documentary films, primarily to institutional theaters, and the distribution of exclusive experiences ranging from live performances to interactive events with leading artists and creators (through the Film Distribution segment) and the provision of film post-production and quality control services (through the Film Post-Production segment); and

(iv)   New Business Initiatives, which is a segment that includes activities related to the expansion of the IMAX brand across new lines of business and new initiatives.

IMAX Network and Backlog



Year

Ended December 31,



Theater System Signings:


2021




2020



New IMAX Theater Systems











Sales and sales-type lease arrangements



20





28



Hybrid joint revenue sharing lease arrangements







18



Traditional joint revenue sharing arrangements



9





2



         Total new IMAX Theater Systems



29





48



Upgrades of IMAX Theater Systems



7





17



   Total IMAX Theater System signings



36





65
















Year

Ended December 31,



Theater System Installations:


2021




2020



New IMAX Theater Systems(1)











Sales and sales-type lease arrangements



35





27



Hybrid joint revenue sharing lease arrangements



9





5



Traditional joint revenue sharing arrangements



18





23



         Total new IMAX Theater Systems



62





55



Upgrades of IMAX Theater Systems



13





16



   Total IMAX Theater System installations



75





71
















Year

Ended December 31,



Theater Sales Backlog:


2021




2020



Sales and sales-type lease arrangements



173





185



Hybrid joint revenue sharing lease arrangements



132





147



Traditional joint revenue sharing lease arrangements



184


(2)



195


(2)

Total Theater backlog



489


(3)



527


(4)














Year

Ended December 31,



Theater Network:


2021




2020



Commercial Multiplex Theaters











Sales and sales-type lease arrangements



690





672



Hybrid joint revenue sharing lease arrangements



146





140



Traditional joint revenue sharing lease arrangements



763





750



Total Commercial Multiplex Theaters



1,599





1,562



Commercial Destination Theaters



12





12



Institutional Theaters



72





76



Total Theater network(5)



1,683





1,650



_______________

(1)    Includes nine IMAX Xenon Theater Systems that were relocated from their original location (2020 ― three). When a theater system under a sales or sales-type lease arrangement is relocated, the amount of revenue earned by the Company may vary from transaction-to-transaction and is usually less than the amount earned for a new sale. In certain situations when a theater system is relocated, the original location is upgraded to an IMAX Laser Theater System.

(2)    Includes 44 IMAX Theater Systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement (2020 — 46).

(3)    Includes 158 new IMAX with Laser projection system configurations and 92 upgrades of existing locations to IMAX Laser Theater Systems configurations.

(4)    Includes 157 new IMAX with Laser projection system configurations and 97 upgrades of existing locations to IMAX Laser Theater Systems configurations.

(5)    Period-to-period changes are reported net of the effect of permanently closed theaters.

 

IMAX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except per share amounts)





Three Months Ended













December 31,



Year Ended





(Unaudited)



December 31,





2021



2020



2021



2020


Revenues

















Technology sales


$

31,645



$

25,626



$

66,153



$

49,728


Image enhancement and maintenance services



54,234




20,209




131,148




59,318


Technology rentals



20,082




7,534




46,790




17,841


Finance income



2,611




2,621




10,792




10,116






108,572




55,990




254,883




137,003


Costs and expenses applicable to revenues

















Technology sales



19,260




17,533




37,039




33,170


Image enhancement and maintenance services



19,480




11,549




58,062




53,598


Technology rentals



5,797




6,595




25,376




28,695






44,537




35,677




120,477




115,463


Gross margin



64,035




20,313




134,406




21,540


Selling, general and administrative expenses



34,929




25,238




117,322




108,485


Research and development



1,248




1,056




6,944




5,618


Amortization of intangibles



1,291




1,380




4,877




5,394


Credit loss expense (reversal), net



933




3,026




(3,951)




18,608


Asset impairments












1,151


Legal judgment and arbitration awards






4,105




(1,770)




4,105


Income (loss) from operations



25,634




(14,492)




10,984




(121,821)


Realized and unrealized investment gains (losses)



29




(1,142)




5,340




(2,081)


Retirement benefits non-service expense



(116)




(168)




(463)




(600)


Interest income



538




546




2,218




2,388


Interest expense



(1,558)




(2,390)




(7,092)




(7,010)


Income (loss) before taxes



24,527




(17,646)




10,987




(129,124)


Income tax expense



(11,148)




(1,898)




(20,564)




(26,504)


Equity in losses of investees, net of tax











(1,858)


Net income (loss)



13,379




(19,544)




(9,577)




(157,486)


Net (income) loss attributable to non-controlling interests



(3,279)




(1,701)




(12,752)




13,711


Net income (loss) attributable to common shareholders


$

10,100



$

(21,245)



$

(22,329)



$

(143,775)


Net income (loss) per share attributable to common shareholders -

      basic and diluted:














Net income (loss) per share — basic and diluted


$

0.17



$

(0.36)



$

(0.38)



$

(2.43)




















Weighted average number of shares outstanding (000's):


















Basic



58,886




58,872




59,126




59,237



Diluted



59,805




58,872




59,126




59,237


Additional Disclosure:

















Depreciation and amortization


$

15,512



$

12,005



$

56,082



$

52,704


Amortization of deferred financing costs


$

764



$

307



$

2,513



$

902


 

 

IMAX CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands of dollars, except share amounts)




As of December 31,




2021



2020


Assets









Cash and cash equivalents


$

189,711



$

317,379


Accounts receivable, net of allowance for credit losses



110,050




56,300


Financing receivables, net of allowance for credit losses



141,049




131,810


Variable consideration receivable, net of allowance for credit losses



44,218




40,526


Inventories



26,924




39,580


Prepaid expenses



11,802




10,420


Film assets, net of accumulated amortization



4,241




5,777


Property, plant and equipment, net of accumulated depreciation



260,353




277,397


Investment in equity securities



1,087




13,633


Other assets



17,799




21,673


Deferred income tax assets, net of valuation allowance



13,906




17,983


Other intangible assets, net of accumulated amortization



23,080




26,245


Goodwill



39,027




39,027


Total assets


$

883,247



$

997,750


Liabilities









Accounts payable


$

15,943



$

20,837


Accrued and other liabilities



111,896




99,354


Revolving credit facility borrowings, net of unamortized debt issuance costs



2,472




305,676


Convertible notes, net of unamortized discounts and debt issuance costs



223,641





Deferred revenue



81,281




87,982


Deferred income tax liabilities



17,642




19,134


Total liabilities



452,875




532,983


Commitments and contingencies









Non-controlling interests



758




759


Shareholders' equity









Capital stock common shares — no par value. Authorized — unlimited number.









58,653,642 issued and outstanding (December 31, 2020 — 58,921,731 issued and 58,921,008 outstanding)



409,979




407,031


Less: Treasury stock, nil shares at cost (December 31, 2020 — 723)






(11)


Other equity



174,620




188,845


Statutory surplus reserve



3,932





Accumulated deficit



(234,975)




(202,849)


Accumulated other comprehensive income



2,527




988


Total shareholders' equity attributable to common shareholders



356,083




394,004


Non-controlling interests



73,531




70,004


Total shareholders' equity



429,614




464,008


Total liabilities and shareholders' equity


$

883,247



$

997,750


 

 

IMAX CORPORATION 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of dollars)




Years Ended December 31,




2021



2020


Operating Activities











Net (loss) income


$


(9,577)



$


(157,486)


Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities:











Depreciation and amortization




56,082





52,704


Amortization of deferred financing costs




2,513





902


Credit loss (reversal) expense, net




(3,951)





18,608


Write-downs




1,764





17,729


Deferred income tax expense




2,996





23,618


Share-based and other non-cash compensation




26,079





22,038


Unrealized foreign currency exchange loss (gain)




256





(1,355)


Realized and unrealized investment (gains) losses




(5,340)





2,081


Equity in losses of investees








1,858


Changes in assets and liabilities:











Accounts receivable




(52,453)





33,597


Inventories




11,451





1,637


Film assets




(14,810)





(7,665)


Deferred revenue




(6,591)





(6,637)


Changes in other operating assets and liabilities




(2,354)





(24,640)


Net cash provided by (used in) operating activities




6,065





(23,011)


Investing Activities











Purchase of property, plant and equipment




(3,590)





(697)


Investment in equipment for joint revenue sharing arrangements




(10,094)





(6,654)


Acquisition of other intangible assets




(4,092)





(1,904)


Proceeds from sale of equity securities




17,769






Net cash used in investing activities




(7)





(9,255)


Financing Activities











Proceeds from issuance of convertible notes, net




223,675






Debt issuance costs related to convertible notes




(1,161)






Purchase of capped calls related to convertible notes




(19,067)






Revolving credit facility borrowings




3,600





287,610


Repayment of revolving credit facility borrowings




(307,609)






Credit facility amendment fees paid




(527)





(1,073)


Repurchase of common shares, IMAX Corporation




(13,905)





(36,624)


Repurchase of common shares, IMAX China




(10,060)





(1,534)


Treasury stock purchased for future settlement of restricted share units








(3,086)


Taxes withheld and paid on employee stock awards vested




(3,660)





(512)


Common shares issued - stock options exercised




883






Dividends paid to IMAX China non-controlling interests




(4,889)





(4,214)


Net cash (used in) provided by financing activities




(132,720)





240,567


Effects of exchange rate changes on cash




(1,006)





(406)


(Decrease) increase in cash and cash equivalents during year




(127,668)





207,895


Cash and cash equivalents, beginning of year




317,379





109,484


Cash and cash equivalents, end of year


$


189,711



$


317,379


 



Three Months Ended



Year Ended




December 31,



December 31,




2021



2020



2021



2020


Revenue

















IMAX Technology Network

















IMAX DMR


$

31,221



$

10,204



$

70,659



$

28,265


Joint revenue sharing arrangements, contingent rent



20,076




7,534




46,184




17,841





51,297




17,738




116,843




46,106


IMAX Technology Sales and Maintenance

















IMAX Systems



30,543




26,381




65,660




54,055


Joint revenue sharing arrangements, fixed fees



1,630




860




5,406




2,056


IMAX Maintenance



20,143




8,774




53,339




21,999


Other Theater Business(1)



1,080




405




2,363




1,666





53,396




36,420




126,768




79,776


Film Distribution and Post-Production



1,723




1,178




5,724




8,719


New Business Initiatives



1,150




738




3,704




2,226


Sub-total for reportable segments



107,566




56,074




253,039




136,827


Other



1,006




(84)




1,844




176


Total


$

108,572



$

55,990



$

254,883



$

137,003



















Gross Margin (Margin Loss)

















IMAX Technology Network

















IMAX DMR


$

22,377



$

6,239



$

44,782



$

13,731


Joint revenue sharing arrangements, contingent rent



14,462




1,110




21,761




(9,500)





36,839




7,349




66,543




4,231


IMAX Technology Sales and Maintenance

















IMAX Systems



13,335




10,319




34,981




24,816


Joint revenue sharing arrangements, fixed fees



560




419




1,343




529


IMAX Maintenance



12,212




3,423




27,572




3,068


Other Theater Business



129




(515)




398




(438)





26,236




13,646




64,294




27,975


Film Distribution and Post-Production(2)



(149)




(806)




848




(10,198)


New Business Initiatives



1,118




633




3,399




1,878


 Sub-total for reportable segments



64,044




20,822




135,084




23,886


Other



(9)




(509)




(678)




(2,346)


Total


$

64,035



$

20,313



$

134,406



$

21,540


_______________

(1)    The revenue from this segment principally includes after-market sales of IMAX projection system parts and 3D glasses.  

(2)    During the three months and year ended December 31, 2020, Film Distribution segment results include impairment losses of $0.1 million and $10.0 million, respectively, to write-down the carrying value of certain documentary and alternative content film assets due to a decrease in projected box office totals and related revenues based on management's regular quarterly recoverability assessments. No such charges incurred in the three months and year ended December 31, 2021.

IMAX CORPORATION
NON-GAAP FINANCIAL MEASURES
(in thousands of U.S. dollars)

In this release, the Company presents adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share, EBITDA, Adjusted EBITDA per Credit Facility, Adjusted EBITDA margin, and free cash flow as supplemental measures of the Company's performance, which are not recognized under U.S. GAAP. Adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per basic and diluted share exclude, where applicable: (i) share-based compensation; (ii) COVID-19 government relief benefits, net, (iii) legal judgment and arbitration awards; (iv) realized and unrealized investment gains or losses, as well as the related tax impact of these adjustments, and (v) income taxes resulting from management's decision to no longer indefinitely reinvest the historical earnings of certain foreign subsidiaries.

The Company believes that these non-GAAP financial measures are important supplemental measures that allow management and users of the Company's financial statements to view operating trends and analyze controllable operating performance on a comparable basis between periods without the after-tax impact of share-based compensation and certain unusual items included in net income (loss) attributable to common shareholders. Although share-based compensation is an important aspect of the Company's employee and executive compensation packages, it is a non-cash expense and is excluded from certain internal business performance measures.

A reconciliation from net income (loss) attributable to common shareholders and the associated per share amounts to adjusted net income (loss) attributable to common shareholders and adjusted net income (loss) attributable to common shareholders per diluted share is presented in the table below. Net income (loss) attributable to common shareholders and the associated per share amounts are the most directly comparable GAAP measures because they reflect the earnings relevant to the Company's shareholders, rather than the earnings attributable to non-controlling interests.

In addition to the non-GAAP financial measures discussed above, management also uses "EBITDA," as such term is defined in the Company's Credit Agreement, and which is referred to herein as "Adjusted EBITDA per Credit Facility." As allowed by the Credit Agreement, Adjusted EBITDA per Credit Facility includes adjustments in addition to the exclusion of interest, taxes, depreciation and amortization. Adjusted EBITDA per Credit Facility measure is presented to allow a more comprehensive analysis of the Company's operating performance and to provide additional information with respect to the Company's compliance against its Credit Agreement requirements when applicable. In addition, the Company believes that Adjusted EBITDA per Credit Facility presents relevant and useful information widely used by analysts, investors and other interested parties in the Company's industry to evaluate, assess and benchmark the Company's results.

EBITDA is defined as net income or loss excluding (i) income tax expense or benefit; (ii) interest expense, net of interest income; (iii) depreciation and amortization, including film asset amortization; and (iv) amortization of deferred financing costs. Adjusted EBITDA per Credit Facility is defined as EBITDA excluding: (i) share-based and other non-cash compensation; (ii) realized and unrealized investment gains or losses; (iii) write-downs, net of recoveries, including asset impairments and credit loss expense; (iv) legal judgment and arbitration awards; and (v) the gain or loss from equity accounted investments.

A reconciliation of net income (loss) attributable to common shareholders, which is the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA per Credit Facility is presented in the table below. Net income (loss) attributable to common shareholders is the most directly comparable GAAP measure because it reflects the earnings relevant to the Company's shareholders, rather than the earnings attributable to non-controlling interests.

Free cash flow is defined as net cash provided by or used in operating activities minus cash used in investing activities (from the Consolidated Statements of Cash Flows). Management views free cash flow, a non-GAAP measure, as a measure of the Company's after-tax cash flow available to reduce debt, add to cash balances, and fund other financing activities. Free cash flow does not represent residual cash flow available for discretionary expenditures. A reconciliation of cash provided by operating activities to free cash flow is presented below.

These non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Additionally, the non-GAAP financial measures used by the Company should not be considered as a substitute for, or superior to, the comparable GAAP amounts.

Adjusted EBITDA per Credit Facility



For the Three Months Ended December 31, 2021 (1)



For the Three Months Ended December 31, 2020 (1)




Attributable to

Non-controlling



Less:






Attributable to

Non-controlling



Less:







Interests and



Attributable to



Attributable to



Interests and



Attributable to



Attributable to




Common



Non-controlling



Common



Common



Non-controlling



Common




Shareholders



Interests



Shareholders



Shareholders



Interests



Shareholders


(In thousands of U.S. Dollars)































Reported net income (loss)


$


13,379



$


3,279



$


10,100



$


(19,544)



$


1,701



$


(21,245)


Add (subtract):































Income tax expense




11,148





1,557





9,591





1,898





717





1,181


Interest expense, net of interest income




257





(91)





348





1,537





(90)





1,627


Depreciation and amortization, including film asset amortization




15,512





1,345





14,167





12,005





1,099





10,906


Amortization of deferred financing costs(2)




764









764





307









307


EBITDA


$


41,060



$


6,090



$


34,970



$


(3,797)



$


3,427



$


(7,224)


Stock and other non-cash compensation




7,521





290





7,231





5,693





226





5,467


Realized and unrealized investment (gains) losses




(29)









(29)





1,142





353





789


Write-downs, including asset impairments and credit loss expense




1,819





(23)





1,842





7,416





533





6,883


Legal judgment and arbitration awards
















4,105









4,105


Adjusted EBITDA per Credit Facility


$


50,371



$


6,357



$


44,014



$


14,559



$


4,539



$


10,020


Revenues attributable to common

   shareholders(3)




108,572





10,738





97,834





55,990





7,926





48,064


Adjusted EBITDA margin attributable to common

   shareholders




46.4

%




59.2

%




45.0

%




26.0

%




57.3

%




20.8

%


































For the Twelve Months Ended December 31, 2021 (1)



For the Twelve Months Ended December 31, 2020 (1)




Attributable to

Non-controlling



Less:






Attributable to

Non-controlling



Less:







Interests and



Attributable to



Attributable to



Interests and



Attributable to



Attributable to




Common



Non-controlling



Common



Common



Non-controlling



Common




Shareholders



Interests



Shareholders



Shareholders



Interests



Shareholders


(In thousands of U.S. Dollars)































Reported net loss


$


(9,577)



$


12,752



$


(22,329)



$


(157,486)



$


(13,711)



$


(143,775)


Add (subtract):